PAR News - Tues, 07 May 2024

TOPLINE

• The Sindh Abadgar Board (SAB) discussed a major wheat scam that has caused significant financial losses to farmers in Sindh and Punjab.
• The Economic Coordination Committee (ECC) of the Cabinet is poised to approve increasing the wheat target by 0.40 MMT to 1.80 MMT and allocating an additional Cash Credit Limit (CCL) of Rs 41.50 billion for procurement purposes.
• Climate change has become a stark reality in Pakistan, where extreme weather now threatens unbearable summers and potential heatwaves, especially in the south.
• The gas supply crisis in Karachi is affecting all levels of society, including the diplomatic community.  Iran's Consul General in Karachi shared his personal difficulties, noting that on some nights, it was quite challenging to cook a meal due to the gas shortages.
• Executives from Saudi mining firm Manara Minerals are in Islamabad to discuss buying a stake in Pakistan's Reko Diq gold and copper mine, according to government documents.
• Cellular companies and telecom operators have voiced concerns to the Ministry of IT about the FBR's decision to block SIMs of non-filers, citing rushed implementation and adverse effects on customers.

AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS

• Wheat Scam Hits Farmers Hard: The Sindh Abadgar Board (SAB) discussed a major wheat scam that has caused significant financial losses to farmers in Sindh and Punjab. The board expressed solidarity with protesting farmers and noted that market conditions have led to a 'surplus wheat crisis,' with prices falling well below the support level, leaving no buyers even at reduced rates. [Dawn]
• Wheat Target Expansion Approved: The Economic Coordination Committee (ECC) of the Cabinet is poised to approve increasing the wheat target by 0.40 MMT to 1.80 MMT and allocating an additional Cash Credit Limit (CCL) of Rs 41.50 billion for procurement purposes. This decision follows a proposal from the Ministry of National Food Security and Research, which was previously endorsed by the ECC and later ratified by the Federal Cabinet. [BR]
• Wheat Import Mismanagement Sparks Concern: Official documents revealed that the federal government's failure to stop private wheat imports, despite provincial objections, favored the private sector at the expense of local farmers. The Economic Coordination Committee (ECC) learned on February 1, 2024, that the total wheat availability for 2022-23 was 32.27 million metric tons (MMT), including carry-forward stocks, resulting in a 2.40 MMT shortfall. [BR]
• Khyber Pakhtunkhwa Begins Wheat Procurement: The Khyber Pakhtunkhwa government starts its wheat procurement of 300,000 metric tons today, with a budget of 29 billion rupees, at a rate of Rs 3900 per 40 kg sack. To oversee the process, committees including various local officials and observers from the NAB and anti-corruption department have been established, and 22 procurement centers have been set up across the region. [ET] [PO] [Samaa]
• Cotton Yield Warning Issued: The FPCCI's Agriculture Committee warned that Punjab's cotton yield might decline due to wheat procurement issues. They advised prioritizing wheat procurement and adding temporary storage in each Tehsil. Cotton prices in Punjab and Sindh are between Rs 19,500 and Rs 21,500 per maund, with phutti at Rs 9,500 to Rs 10,000 per 40 kg, and a steady spot rate of Rs 19,700 per maund. [BR]
• Pakistan Services Exports Grow: In March, Pakistan's services exports grew by 6.77% year-on-year to $710.75 million, marking a second consecutive month of increase. From July to March FY24, services exports slightly decreased by 0.08% to $5.80 billion, though in rupee terms, they significantly rose by 20.69% to Rs 1.65 trillion. [Dawn]
• Sesame Export: 29% growth was witnessed in Pakistan’s export of sesame seeds to China during Q1 2024. [ET]
• Dry Fruits & Nuts Import: Rs 1.37 billion was the import value of dry fruits and nuts in March 2024, up 132% compared to Rs 592 million in March 2023. [ET]
• Leather Export: Rs 3.96 billion was the export value of leather garments in March 2024, down 15.89% compared to Rs 4.71 billion in March 2023, according to the PBS. [ET]

ENERGY - WEATHER, WATER & POWER

• Climate Threats Intensify in Pakistan: Climate change has become a stark reality in Pakistan, where extreme weather now threatens unbearable summers and potential heatwaves, especially in the south. Meanwhile, the PDMA predicts light to moderate rainfall across various regions, including Lahore and northern Punjab, urging Pothohar farmers to take precautions for their wheat crops in anticipation. [ET] [Samaa]
• Diplomat Highlights Karachi Gas Crisis: The gas supply crisis in Karachi is affecting all levels of society, including the diplomatic community. Iran's Consul General in Karachi, Hassan Nourian, highlighted the issue by sharing his personal difficulties, noting that on some nights, it was quite challenging to cook a meal due to the gas shortages. [Dawn]
• Iran-Pakistan Gas Pipeline Advances: Iran’s Consul General to Pakistan, Hassan Nourian, stated that both countries are committed to completing the long-delayed gas pipeline project despite concerns over US sanctions. The project aims to supply natural gas to Pakistan’s Balochistan and Sindh provinces, with discussions ongoing to resolve any remaining issues. [BR] [ET]
• World Bank Consults on Solar Power: The government asked the World Bank for help with rising capacity payments as solar power adoption grows. Private imports of solar panels hit 6,800 MW, with households generating 3,000 MW through solarization. Martin Raiser led a World Bank mission that met Energy Ministry officials to discuss solutions. [The News]
• Proposed Standstill Agreement for Power Project: The Attorney General’s Office has proposed a standstill agreement between the Power Division, NTDC, and Star Hydro Power Limited to resolve all matters regarding a 147 MW project. This proposal, made on April 24 and reiterated on April 29, suggests negotiation within an agreed timeframe, with the AGP Office offering assistance if needed, according to sources. [BR]
• K-Electric's Ambitious Renewable Roadmap: K-Electric plans to set up 640 MW of renewable energy, targeting a 30% share by 2030, highlighted in a roadshow with local and international institutions. Collaboration with Balochistan and Sindh governments includes land allocation for solar projects totaling 420 MW, alongside a 220 MW hybrid (wind and solar) project in Dhabeji, Sindh. [The News]
• Power Division Seeks Urgent Funds: As the fiscal year ends, the Power Division has requested an immediate disbursement of Rs 130 billion for subsidies owed to K-Electric and Azad Jammu & Kashmir. This request is among several for supplementary grants to be reviewed by the Economic Coordination Committee, chaired by Finance Minister Muhammad Aurangzeb, on Tuesday. [Dawn]
• Revenue Losses Mount: Gas Curtailment Crisis - In the past six months, E&P companies lost over $30 million in revenue due to forced gas curtailment, resulting in associated oil and LPG curtailment. With gas curtailment at 6,000 mmscf per day, companies face a daily revenue loss of $2 million, risking permanent reserve loss. [The News]
• Extended Gas Subsidy for Fertilizer Plants: The Ministry of Industries and Production proposes extending subsidized gas supply to two SNGPL-based urea fertilizer plants until September 30, 2024, to meet Kharif season 2024 needs, as discussed in a recent Fertilizer Review Committee meeting. This follows an earlier decision by the ECC of the Cabinet, ratified by the Cabinet, to allow operations until March 2024 with certain conditions. [BR]
• Manara Minerals Eyes Reko Diq Stake: Executives from Saudi mining firm Manara Minerals are in Islamabad to discuss buying a stake in Pakistan's Reko Diq gold and copper mine, according to government documents. The mine, jointly owned by Barrick Gold Corp and Pakistan, is a significant underdeveloped copper-gold area. Manara Minerals is part of a Saudi delegation in Islamabad to negotiate the deal, as Barrick plans a $10 billion investment in the project. [BR]

PAKISTAN - ECONOMICS, POLITICS & SECURITY

• Supreme Court Halts Election Commission Decision: The Supreme Court suspended the Election Commission of Pakistan's decision, along with the Peshawar High Court's verdict, which denied reserved seats for women and minorities to the Sunni Ittehad Council (SIC) and allocated them to other parties. A three-member bench led by Justice Syed Mansoor Ali Shah admitted appeals from SIC and the Speaker of the Khyber Pakhtunkhwa Assembly for regular hearing and issued notices to the respondents. [The News] [ET]
• Supreme Court Slams Commission Report: The Supreme Court criticized the Faizabad sit-in commission for exceeding its mandate and possibly settling personal scores in its report. Chief Justice Qazi Faez Isa described the eight-volume report, submitted on March 6 after being formed in November 2023, as a sheer waste of national time. [Dawn] [ET]
• Saudi Crown Prince to Boost Investment in Pakistan: Saudi Crown Prince Mohammed bin Salman is expected to visit Pakistan next week for crucial talks and signing MoUs to boost Saudi investment in various sectors. The visit's final dates are being finalized through diplomatic channels, with the trip likely to take place by the end of next week. [BR] [ET]
• Pakistani Investment Potential Praised by Saudi Deputy: Saudi Deputy Investment Minister Ibrahim Almubarak highlighted Pakistan's importance as a top economic and investment opportunity during a two-day investment conference. He leads a 50-member Saudi trade delegation exploring trade and investment avenues in Islamabad following recent high-level exchanges. [BR]
• Pakistan Negotiates $8B World Bank Partnership: Pakistan has begun negotiations with the World Bank for a four-year Country Partnership Strategy, aiming for a potential $8 billion commitment. The CPS, expected to span FY 2025 to FY 2029, is currently being discussed and is anticipated to be finalized in the coming months after previous delays due to elections and government formation. [The News]
• Roshan Packages at Saudi-Pakistan Investment Forum: Roshan Packages (RPL) is participating in the Saudi Arabia-Pakistan Investment Forum 2024, engaging in B2B meetings. They commend both governments for fostering vital dialogues. A two-day Pakistan-Saudi Arabia investment conference has begun in Islamabad, with a high-level Saudi delegation exploring investment opportunities. [MG]

INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT

• Israel Genocide: Israel conducted airstrikes on Rafah, leading residents to evacuate after being ordered to leave specific areas. Fears of a full assault on Hamas holdouts in Rafah are rising as ceasefire talks stall in Cairo. The city, sheltering over a million displaced people, has become a last refuge amid Israel's ongoing assault on Gaza. Hamas cautioned that any Israeli operation in Rafah could endanger ceasefire negotiations. [BR] [ET]
• BJP Animated Videos Spark Election Controversy: Animated videos shared by Prime Minister Narendra Modi’s party, the Bharatiya Janata Party (BJP), have triggered complaints and outrage during India's election campaign. The videos, posted on social media platforms, accuse the opposition Congress of favoring the Muslim community over disadvantaged tribal and Hindu caste groups. [BR]
• Russian Threat Over Missiles: Moscow threatened to strike British military targets in Ukraine and elsewhere if Kyiv uses British-supplied missiles to attack Russia. This came after British Foreign Secretary David Cameron said Ukraine had the right to retaliate and stated that Britain put no restrictions on how its supplied weapons could be used. [BR] [ET]
• Oil Futures Climb on Tensions: Oil futures rose on Monday, with Brent crude reaching $83.65 a barrel and West Texas Intermediate at $78.89, driven by Saudi Arabia raising June crude prices and ongoing tensions in Gaza. In related markets, the benchmark palm oil contract in Malaysia increased to 3,863 ringgit per metric ton, while soyoil prices on both the Dalian and Chicago exchanges also saw gains. [BR] [BR]

OPINION(S) & REMAINDERS

• Telecom Operators Challenge FBR's SIM Blocking: Cellular companies and telecom operators have voiced concerns to the Ministry of IT about the FBR's decision to block SIMs of non-filers, citing rushed implementation and adverse effects on customers. The letter has also been forwarded to the PTA regarding the FBR's order to block SIMs of 506,671 individuals who did not file tax returns for 2023. [BR] [Dawn] [ET]
• SEC Approves PIA Holding Company Scheme: The Securities and Exchange Commission of Pakistan has approved the Scheme of Arrangement between Pakistan International Airlines Corporation Limited (PIA) and PIA Holding Company Limited (HoldCo). The scheme, previously endorsed by the Federal Cabinet, shareholders, and creditors of PIA, aims to legally segregate the airline's operations. [BR]
• Opinion: Wheat, Wheat Everywhere… - “Whatever the outcome of the inquiry committee report, and there are grave doubts it will amount to much, the totally ridiculous and unnecessary import of wheat by the caretaker government smacks of mala fide corruption and vested interest that has robbed the farmers, particularly small landholders, of the fruits of their hard labour. Is there no justice to be had in this Mad Hatter’s Tea Party system in our benighted country?” - By Rashed Rahman [BR]